If you have a lot of unpaid debts and creditors are threatening wage garnishment, you may have to deal with a court battle in the very near future. Creditors can legally garnish your wages, but only after they obtain a court order. Garnishment is usually a “last resort” effort by creditors to collect on their debt. It’s likely that they’ve exhausted all other options and cannot get you to pay for your debt within a reasonable amount of time.
Unfortunately, letting the situation escalate to this level can hurt you. Once the courts order your wages to be garnished, your employer will be aware of your financial situation and you’ll have fewer options to improve your credit standing. The best thing you can do is to take steps to avoid wage garnishment altogether – don’t just stick your head in the sand!
Here’s what you can do to stop the garnishment of your wages:
- Stay in touch with your creditor. Remember that a creditor will pursue wage garnishment when they cannot seem to get you to pay your debt within a certain timeframe. If you have been ignoring them or refuse to talk to them – and haven’t filed for bankruptcy so that the creditor is required by law to stop contacting you or pursue further action — you put yourself in a weaker position. Do your best to stay in touch with the creditor and work on setting up a reasonable repayment plan. Showing the creditor that you have every intention of paying back your debt might encourage them to back off for now.
- File an appeal. If the wage garnishment has already been approved by the court, you do have the right to file a “claim of exemption” which basically shows that you cannot afford this type of paycut because your paycheck is covering all of your basic living costs, such as housing, insurance and your grocery bill. You will need to prove to the court that you would essentially get behind on your regular bills if your wages were garnished. If the court is convinced that the garnishment would end up putting you in a worse financial situation than you are already in, they may prevent the creditor from garnishing your wages or ask the creditor to reduce the amount that is to be garnished.
- Pay the judgment amount. If you do have some funds available to pay off the full debt within 10 days of the judgment, the court can stop the garnishment process altogether. Make sure you’re aware of the judgment amount and take steps to pay it off in full as soon as you can.
The simplest way to stop garnishment of your wages is to file for bankruptcy, but that’s not always a feasible solution for most people. Being proactive when creditors are coming after you can help to prevent this drastic step altogether. Do your best to work out a repayment plan with your creditor so that they are confident you will be paying the debt within a certain timeframe.
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